How to play todays strong AU Capex data and tomorrows retail sales - AUDJPY

This morning, some good news for the Australian economy within the details of the Q3 Private New Capital Expenditure (Capex) survey.

Australia

 

Aside from the 2.2% fall in the September quarter, which was bang on expectations and a function of lockdowns in NSW and Vic, the survey showed a sizeable lift in future investment spending plans.

Firm’s spending intentions for the 2021/2022 year increased by 8.6% to $138.6bn from $127.7 bn. The lift in spending intentions bodes well for a strong recovery in GDP after the inevitable lockdown induced September quarter decline, due to be released next Wednesday.

More economic rays of sunshine are expected from Australian retail sales data for October to be released at 11.30 am tomorrow. 

Following a 1.3% gain in September, the first increase since May as lockdown took hold over parts of the country, another strong number for October is expected tomorrow. 

The market is looking for a 2.5% gain, and this print is likely to be followed by an even stronger lift in November, reflecting the full re-opening in NSW, Victoria, and the ACT.

Strong Australian data is unlikely to derail the powerful downtrend for the AUDUSD, so we prefer expressing the expected better retail sales data via AUDJPY.

If AUDJPY can break above downtrend resistance and this week’s highs 83.30/40ish, consider going long the cross looking for the rally to extend towards initial resistance 84.25/50ish before 85.00.

The stop loss should be placed initially below the recent 82.15 swing low, looking to trail it higher, presuming the rally takes hold as expected.

 

AUDJPY Daily Chart

 

Source Tradingview. The figures stated areas of November 25th, 2021. Past performance is not a reliable indicator of future performance.  This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

 

  1. Open a Forex.com account, or log in if you’re already a customer.
  2. Search for the pair you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.